Microsoft Now Turning Gears of War

By Peter Suciu
Jan 27, 2014 1:27 PM PT

Microsoft on Monday announced that it had reached a deal with Epic Games to acquire all the rights to existing and future installments in the action franchise
Gears of War. Microsoft also will acquire the rights to all entertainment experiences and merchandise for the popular third-person science fiction shooter.

Black Tusk Studios will take over its development, and Rod Fergusson, former director of production at Epic Games, will join Microsoft and play a key studio leadership role going forward, Microsoft spokesperson Martin McBride told the E-Commerce Times.

"The Gears of War franchise has a very strong, passionate and valued fan base on Xbox," said Phil Spencer, head of Microsoft Studios. "Over 22 million units have been sold across all Gears of War titles worldwide, grossing over (US)$1 billion dollars. This franchise, and these fans, are part of the soul of Xbox. By acquiring this franchise, Microsoft Studios will continue to offer them more of their favorite games and entertainment experiences from the Gears of War universe."

Gears Keep Turning

Gears of War made its debut on the Xbox 360 in 2006 and has been one of the console's flagship franchises.

"The franchise is synonymous with Xbox, and Microsoft is synonymous as the game's publisher. Early in the franchise's history, it also stretched out onto PC but was then released purely for Xbox 360 in all subsequent installments," Steve Bailey, senior analyst for games at
IHS Electronics and Media, told the E-Commerce Times.

"It's a worthwhile exclusive for Microsoft: a driver of what Xbox 360 has been capable of from a technical perspective, as well as a moderately well-featured multiplayer experience to stimulate player engagement with Xbox Live. It's also been a regular feature of hardware-bundle promotions, in both the UK and USA," he said.

"Gears of War rights acquisition is a strategic move intended to stimulate Microsoft Xbox One sales," Ted Pollak, senior analyst for the game industry at
Jon Peddie Research, told the E-Commerce Times.

"The razors-and-blades business model still applies. Both Sony and Microsoft will be looking for any advantage to boost sales now that the holiday euphoria has passed. This is where the console war truly begins," he added.

Epic Impact

Microsoft's outright acquisition of Gears of War is "somewhat surprising, both from Microsoft's standpoint and Epic's," said Wanda Meloni, senior analyst at
M2 Research.

"However, Microsoft had opened their Vancouver studio, Black Tusk, back in 2012 with the specific intent to develop a big franchise," she noted.

"Microsoft has done this before when it acquired the Halo franchise with Bungie, so it isn't a new concept to them," Meloni told the E-Commerce Times.

"I'm interested in the ramifications for Epic," she said. "They obviously get a good chunk of change out of the deal, but it also frees them up to possibly focus on other development, IP, platforms -- who knows? We'll have to wait and see for that."

Keeping It in High Gear

Some franchises -- notably Grand Theft Auto -- seem capable of returning with hit after hit indefinitely, but other once-popular series, such as Call of Duty and Battlefield, have seen declining returns.

The Gears of War team will "have to figure out how to keep the franchise fresh and current. If Microsoft can do that, I think they have another strong brand to support the Xbox One," remarked Meloni.

"This isn't the first time that Microsoft has shuffled around the workings of some of its major first-party output for Xbox," noted IHS' Bailey.

"Halo also underwent a shift away from its original studio," he pointed out.

"Given the return involvement of one of the franchise's key overseers and Microsoft's track-record in first-party game publishing, I'd suggest Gears of War can remain a key pillar in the Xbox software catalog," Bailey predicted. "The question now is one of timing, and how quickly they can rebirth the series on Xbox One."